The solar industry was in limbo last night after the Government defied pleas
to accept an Appeal Court ruling that the decision to slash solar subsidies
in December was unlawful.

Chris Huhne, the Energy Secretary, said he would seek permission to appeal to the Supreme Court, meaning businesses and consumers have no idea whether solar panels installed in coming weeks will earn 43p per kilowatt hour (kWh) for energy generated over the next 25 years or could yet have a new 21p/kWh rate imposed retrospectively.

The CBI called on the Government to "draw a line under this saga" and provide certainty, while Consumer Focus said Mr Huhne's "disappointing" decision could "undermine consumer confidence".

The Government proposed changes last week that will mean installations completed after March 3 will receive a lower rate, irrespective of the outcome of the legal fight to retain the proposed December 12, 2011, cut-off.

The Court of Appeal agreed yesterday with an earlier High Court ruling that the December date – imposed with just six weeks' notice and before a consultation had ended – was unlawful.

The ruling raised the prospect of a new rush for installations between now and March, but uncertainty caused by the Government's decision to appeal to the Supreme Court may prevent that. "Projects are likely be kept on hold and jobs will be on the line as companies can no longer work to the March 3 date with any degree of confidence," said Clare King, of law firm Osborne Clarke.

Ministers want to cut the subsidy on the grounds the cost of installations has fallen so that the 43p rate provides unsustainably high returns to homeowners, paid for on consumer energy bills. Greg Barker, the Energy Minister, said paying the higher rate for installations between December 12 and March 3 would cost an extra £1.5bn.

Businesses have warned of thousands of job losses as a result of the way in which the tariff cut has been handled.